Many of our clients have indicated to us that;

1. They have not yet received any letters;
2. When querying those letters to Revenue SA they could not get through by telephone; and
3. When attempting to complete their declarations by the due date were confronted with some very onerous steps, many of which they did not understand.

You may have heard that the timeline for making these declarations has been extended to 31 July 2020. The pressure is off right?

Wrong!

It is the view of Welden & Coluccio Lawyers that although the deadline to submit your landholding declarations has been extended to the end of July, the Land Tax legislation that has been enacted still requires certain steps to be taken prior to 30 June.

If possible, we are urge our clients to make the landholding declarations prior to 30 June 2020.

Welden & Coluccio Lawyers’ strongly advise that all landowners seek assistance from their accountant or solicitor with respect to the landholding declarations – in almost all of the cases were we have assisted there have been errors in the original purchase/transfer documents and registration, difficulties in supplying the required documentary evidence and  most importantly opportunities to reduce potential Land Tax have been recognized.

When completing the landholding declarations through the online portal you must have some of the following documents at the ready;

1. Trust deeds and all variations and amendments to those deeds;
2. Copies of the original Transfer (purchase) of the property;
3. Settlement Statements for the purchase;
4. Tax returns for the entity holding the land;
5. Financial Statements confirming the land as an asset; and
6. Relevant Beneficiary Nominations which may lower a Land Tax assessment.

There are other documents that may be required depending on the specific circumstances.  This may include a statutory declaration if, we assume, many of the above documents cannot be located.  Welden & Coluccio Lawyers can assist with the preparation and swearing of that declaration.

Welden & Coluccio Lawyers are also able to assist clients in retrieving some critical documents which may be unavailable such as the original transfer (purchase) of the property.

We strongly advise that you:

1. Be prepared, have all the necessary documentation ready in advance;
2. Seek assistance from your accountant or solicitor as soon as possible (don’t leave it to the last minute);
3. Complete the landholding declaration prior to 30 June 2020.

Our lawyers are readily available to speak to by telephone, video link or even face to face with appropriate social distancing and hygiene measures in place.

Don’t leave it too late, act now.

Welden & Coluccio Lawyers have previously written about, and personally presented (pre pandemic of course) several seminars for the public concerning the new State Government changes to Land Tax. Those changes caused a huge stir amongst landowners, small time investors, large operators, Accountants and Lawyers when news broke back in late 2019. It seems however that these changes, the largest to Land Tax in this State’s history, have taken a back seat to all things COVID related. Well, time marches on, at the looming deadline of 30 June 2020 for many changes to kick in fast approaches.

If you own land via a company or are a Director of a company that owns land, you would have recently received a letter from Revenue SA demanding you log into the Revenue SA portal and advise them of certain information including but not limited to:

•  which other companies are related corporations
• if the land is held in a trust
• if that trust is an exempt entity, and
• whether an individual beneficiary has been nominated by the trust.

The letter includes a nasty RED heading that reads – ACTION REQUIRED BY 3 JUNE 2020. As if things couldn’t get more scary!
A vast array of highly specific (some legal) terms are used with little to no explanation other than to refer you to other sources of information, like previous fact sheets or the core legislation and regulations.

For many, if not most, this will be information overload and simply too difficult to comprehend especially when most of our attention has needed to be fixed elsewhere.
Despite the difficulty in understanding how the new Land Tax scheme operates, it appears that the State Government and Revenue SA have placed absolute responsibility for providing correct and accurate information on each landowner.
Get it wrong and penalties with interest will apply!

Although there are other critical elements of the new legislation that all landowners must be aware of (aggregation, grouping of corporations etc), one of the most important (and least understood) is that of the option of nominating a beneficiary for each discretionary trust which owns land.

The nomination of a beneficiary may result in a lower Land Tax assessment, but please be beware;

1. You can in essence, only get 1 opportunity to make the nomination – if the nomination is withdrawn the trust CANNOT make another nomination – it must be the correct nomination in all the circumstances;

2. If the individual you nominate owns land in their own right, you and they may have inadvertently INCREASED their individual Land Tax assessment;

3. There are strict limitations on who the trustee can actually nominate including, amongst many other things, that they had to have been 18 years of age AS AT 19 OCTOBER 2019. To be very clear, that means that the nominated beneficiary cannnot be 18 years of age at the time you make the nomination but must have been 18 as of October 2019.

It is our strong advice that before you make any nomination of beneficiary or accept any grouping of corporations you first speak to Welden & Coluccio Lawyers to assess your options and whether any existing Land Tax Exemptions might be available to you.

With the new legislation, some exemptions have actually been expanded – so you need to know all of your options and you need to know them now!

All of our lawyers are available to speak to by telephone, video link or even face to face with appropriate social distancing and hygiene measures in place.
Don’t leave it too late, act now.

Especially if you’re an investor with more than one property.

Under sweeping reforms by the Marshall Liberal Government, land tax in South Australia is being turned upside-down.

In the past, land tax was pretty simple; If you owned property in your name, you were taxed accordingly. You could separate those land holdings in different entities, trusts and other legitimate, lawful structures usually suggested for asset protection and good accounting practices.

Now, the entire game is set to change.

It all comes down to changing how trusts and companies are dealt with and something called aggregation.

It’s one big cash grab, and it’s set to send thousands of South Australians’ retirement and estate plans into the gutter.

Calculations we have conducted for clients (retired, hard-working people with modest investments) show some being slugged as much as 4000% more from July 1, 2020.

One couple is now set to pay $13,000 in land tax later this year alone, up from $1,100 last year. That new payment will occur each and every year, not a once off! It doesn’t take a genius to work out this more than offsets any value gained from rental income.

Land tax is a time bomb, and most people won’t find out about it until they open their tax bill in late 2020.

If you own an investment property, or hold property in a Trust, you need to speak to Welden & Coluccio Lawyers immediately.

Places are strictly limited. You must act now to have your best chance of beating the changes before you’re locked in for life.

Call us on 08 7225 8703 to make an appointment.

Welden & Coluccio Lawyers is proud to announce that Natalie Rossi has been appointed to the SA Law Society Council on a two year term.

Natalie joined the Welden & Coluccio team as a graduate lawyer in 2018 and has already proven herself a gifted and dedicated solicitor.

Through her appointment to the Council, she will be able to advocate on behalf of young lawyers throughout the State on issues of importance across the legal field. Congratulations, Nat. You’re a fantastic part of our team and will be an asset to the Law Society too!

Welden & Coluccio Lawyers is a Gold Alliance member of the South Australian Law Society.

Welden & Coluccio Lawyers are proud to announce they have been named the preferred legal partner for the South Australian Hair and Beauty Association (SAHBA).

The SAHBA is a volunteer-run not-for-profit that provides training, advocacy and industry recognition for the State’s hair and beauty professionals.

Solicitor Natalie Rossi will be Welden & Coluccio’s dedicated liaison to the SAHBA, advising on everything from business structures, trusts and working with social media influencers to estate planning.

“The hair and beauty industry is a major employer in South Australia, from bricks and mortar salons to freelancers who travel for their work, it’s a sector driven by entrepreneurship which must constantly innovate to stay ahead of the latest trends in fashion, technology and technique,” Ms Rossi said.

“My role will be to ensure SAHBA members have access to quality legal advice that underpins their work, giving them the freedom to be creative and focus on growing their businesses.

“Hair and beauty professionals work on everything from haute couture runway shows to feature films and even therapy for cancer patients looking to reclaim their sense of self.

“That’s why I’m honoured to have the opportunity to work with SAHBA members to help give them a solid legal foundation on which to build their careers,” Ms Rossi said.

For more information visit:

www.welcolawyers.com.au

www.hairandbeautysa.com.au

Being a social media influencer is just travel, free clothes and cocktails, yeah?

That might be the dream, but here’s some #nofilter advice every aspiring influencer should consider on their way to insta-fame and fortune.

And yes, you’re going to need a lawyer. Sounds boring but keep reading (there’s some great tips here for businesses wanting to work with influencers, too).

There’s three main ways you turn your socials into a career:

1. Paid brand endorsement
2. Affiliate marketing; and
3. Promoting and selling your own products.

Often, it’s a blend of all three. Here’s what each of these looks like in practice.

1: Paid brand endorsement.

• How it looks on insta: You’re sitting by the pool, looking great, clutching a refreshing drink. It’s this great new juice cleanse that has made dieting so much easier. Your skin looks great, you’ve got more energy and you encourage your followers to try it out. You tag the company so everyone knows who you’re talking about because you’d love your followers to try it too.
• Behind the scenes: A juice cleanse company approaches you to endorse their product in exchange for payment. These deals are usually based on a minimum number of Instagram stories and posts about their product.

2: Affiliate marketing.

• How it looks on insta: You’re sitting by the pool, looking great, clutching a refreshing drink. Same juice cleanse but because you care about your fans you’ve negotiated a deal with the company to get 10% off any purchase by using an exclusive coupon code at check-out. This way, you’re not only sharing great health tips with your followers, but because you care you’ve managed to get them a discount, too.
• Behind the scenes: A juice cleanse company approaches you to endorse their product. As an added incentive, you get a small commission for each product they sell through your social media. The coupon code is also a tracking tool that shows just how effective your campaign was. Obviously if the company sees huge sales with your name attached, it’s likely they’ll keep working with you.

3: Promoting and selling your own products.

• How it looks on insta: You’re sitting by the pool, looking great, clutching a refreshing drink. It’s the juice cleanse secret you’re now ready to share with the world. Countless hours of research have gone into this wonderful product, which your fans can purchase at your online store.
• Behind the scenes: It’s the Kylie Jenner model. Either develop something new or slap your name on an existing product and name your price. Much riskier, but potentially more lucrative.

Sound easy, doesn’t it? It’s not. And here’s why you need a lawyer.

Firstly, you need to understand that you are a business and your most valuable asset is your brand.

You need to protect that brand from misuse and exploitation. That is, people who want to use your brand without your permission, and those who want to use your brand without paying a fair rate.

This is where a good lawyer comes in. They can look at the deals you are offered (because there’s always fine print) and tell you what the pitfalls are.

A good lawyer can also help you structure your business in a professional way and assess the risks of any particular endorsements you might be offered. This will protect you in the event something goes wrong.

This is especially important if you’re planning on selling your own products and giving out health and lifestyle advice, as bad advice can lead to problems down the road, especially if you endorse a product that doesn’t do what it claims – or worse – made someone sick.

We’ve helped a few influencers at this firm. One recent case we saw included a contract that was 20 pages long and included a sneaky clause that would have signed over all rights to a particular influencer’s name and image – literally everything of value in their personal brand!

Needless to say, based on our advice, the influencer walked away from the deal and maintained control of their business.

Other times, we’ve helped influencers extract the value in a deal that didn’t seem great on the surface (which included options for affiliate deals).

Similarly, if you’re a business looking to work with an influencer, we can help you get the contracts in place that will help grow long-term, fruitful relationships in this exciting space.

The late Prime Minister Bob Hawke is best remembered for two quotes.

The first, barked to reporters over popping champagne corks at the America’s Cup, is perhaps his most treasured: “Any boss who sacks anyone for not turning up today is a bum.”

The second, rehearsed and delivered with poise and measure, haunted him: “by 1990 no Australian child will be living in poverty”.

It’s a promise that could never be kept.

It’s ironic then, that Mr Hawke’s own daughter is apparently set to challenge his Will on the basis that she’s dipped out in his estate.

A recent article published by The New Daily claims that Mr Hawke’s daughter is preparing a challenge to the late PM’s estate, after the lion’s share of his wealth was left to his second wife Blanche d’Alpuget.

According to reports, Ms d’Alpuget is set to benefit from the entire estate, including the sale of a $15m Sydney mansion, whereas Hawke’s children (from his first marriage to Hazel) will receive about $750,000 each under a deal separate to the Labor legend’s Will.

Ms d’Alpuget’s own son also received such a payment.

While we make no judgement as to the late PM’s relationships with his children, or the merits of such a claim, it’s worthwhile discussing how a claim like this might work given even a former Prime Minister needs to have an iron-clad estate plan in place.

At the centre of any such estate claim is the concept of inadequate provision; that your parents didn’t leave you enough money in the Will to ensure you’re taken care of in the future.

$750,000 sounds like a lot (it is a lot), but there’s a good argument that Mr Hawke’s children deserve a greater share of his substantial wealth given they are blood relatives, maintained good relations with their father and, arguably, didn’t enjoy the fruits of his early labour (pun intended) when Mr Hawke was merely a trade union official and low-ranking politician yet to accumulate his fortune.

However, without knowing how much wealth Ms d’Alpuget brought to the relationship, it could be that a long fight is just beginning.

It’s a classic case of the difficulties in preparing an estate plan for a blended family, because as soon as you remarry, the list of those who can potentially claim against your estate grows.

It takes care, skill, foresight and some creativity to be able to achieve either the right balance so a claim can be avoided or a legal scenario where a claim is fruitless or cannot be made.

Even ex-Prime Minsters need expert advice about estate planning if you are in a second relationship and either (or both) have kids.

If you’re planning your estate, or considering a challenge to one, contact Welden & Coluccio Lawyers – we’re the estate experts.

For many of us, buying and selling our first property can be confusing.

Why all the strings attached? Why the need for conveyancers and solicitors? Can’t I just sign on the dotted line and transfer the money?

All this talk of “encumbrances”, “caveats” and “discharges”. What does it all mean?

Understanding a mortgage is key to getting them to work for you. So let’s take some of the mystery out of buying that first home or investment property.

First, a little history.

50 years ago, a mortgage was once-in-a-lifetime commitment to secure the family home. Today, we’re more likely to be investors, taking on multiple loans to build wealth through equity and rental income.

Back in the good old days, when a mortgage was something you negotiated with your bank manager over dinner, a few extra hoops to jump through wasn’t a problem. Today, you need to strike while the market is hot, which can make all the additional work seem inconvenient.

It might take longer than we’d like, but buying and selling property comes with built in protections, for you and your bank.

These protections – and the need for expert advice – are even more important than ever.

So how does a mortgage work?

When you take out a mortgage, a lender (such as a bank) buys a property on your behalf, committing to sell that property on to you in the form of a loan. Given the lender takes on the risk of this purchase, they want to make sure their investment is safe.

This is the “mortgage”; a loan with additional protections in place to protect the lender. The most obvious of these protections can be found on the official government title for your house, where the name of your bank is listed as the mortgage holder. This is called an “encumbrance”. It’s basically a signal to the world that the property is owned by the bank and subject to a loan.

Why should a mortgage be listed on the title?

It’s an extreme hypothetical, but imagine you got the opportunity to buy a house worth $350,000 for $100,000 cash. A quick search of the title would show the house is subject to a mortgage, meaning there’s probably a debt attached to the property than the seller is concealing, and that debt needs to be settled before the house can be sold.

So does that mean you can’t sell a house when there’s a mortgage? Of course you can.

Even though your lender owns the property, you still have the right to sell that property under the terms of your mortgage. But, as you’d expect, when you sell the bank gets paid first.

This is called a “discharge of mortgage”. This means the bank gives up its rights over the property, allowing you to sell it, in exchange for a cash-settlement of the outstanding loan amount.

Who can arrange a discharge of mortgage?

First thing you need to know – a discharge of mortgage takes time. A few weeks, usually. It’s a legal process and requires forms and the services of a licenced conveyancer or solicitor, like at Welden & Coluccio Lawyers.

The discharge will need to be arranged before you sell your home. This basically frees you up to come to the bargaining table for a sale and shows the other side that you’ve got permission from the bank to sell your home.

Once you’ve lodged your discharge of mortgage application, the lender will speak with your solicitor or conveyancer and arrange to be present at “settlement”. This is where money is exchanged and the sale or purchase of property formalized.

Settlement usually takes place online, but occasionally your conveyancer or solicitor will still have to attend a formal settlement in-person, where discharge documents and cheques are exchanged with other banks and conveyancers (it’s really something to see – like a cattle market at times).

From there, the lender will then generally register the discharge of mortgage at the Land Titles office to show they no longer hold an interest in the property.

It can be a slow, cumbersome process, but it works and is pretty well-designed to prevent fraud.

There are often fees involved in discharging a mortgage, including a discharge fee and, if you have a fixed rate loan, potentially costs associated with breaking your loan. Some lenders also charge a fee for paying off your home loan very early, say within the first three to five years. They’ll usually add these fees to the amount they take from your sale.

What happens next?

So the house is sold, you’ve discharged your mortgage. Congratulations! But, it’s not all profit yet. As you’d imagine, you also need to pay any outstanding bills for the property you’re selling. Think rates, water and other utilities etc.

There could also be fees associated with paying off your mortgage early which have to be taken into account, along with the professional fees for your solicitor or conveyancer.

If you’re not purchasing another property, the balance after all fees have been taken out will usually be transferred into your bank account.

If you are buying another property, that money might be held by your bank or solicitor to put towards another property. Or, if you’ve arranged simultaneous settlement, the bank will automatically put that money towards a new mortgage.

What happens if you come up short?

While negative gearing can be a good thing for property investors, losing money isn’t ideal when it comes to selling a home.

Remember, when you take on a mortgage, you not only have to pay off the principal loan amount, but the interest too.

Selling a property for less than you owe is called Negative Equity, and it could mean having to sell other assets to pay-out the bank. Think your car, another house …

And it’s not just those bad with money who might face this possibility. It’s common for people to get sick or injured and fall behind on loan payments.

Obviously, being in a negative equity situation isn’t great. For this reason, we always suggest those facing a difficult decision with regard to their home consult a suitably qualified solicitor or accountant to get the best advice. Sometimes an innovative solution can be negotiated.

Final thoughts.

Enlist the expertise of an experienced solicitor or conveyancer to oversee your property transactions. That way, the selling process is more likely to run smoothly and especially in the case of solicitor, they can advise you of the best ownership structures to have in place.

You should also see the purchase or sale of a property as a reason to revisit your estate plan and Will.

Your debt doesn’t die with you, so you need to make sure that your children don’t inherit your problems.

There’s an old saying; the only winners in a messy trial are the lawyers.

It’s not strictly true. Litigants often have fantastic wins in the courts, righting wrongs thanks to the hard work of dedicated lawyers. But we need to acknowledge that trials can be very expensive.

As a rule most decent lawyers will do everything to steer a dispute away from court as the costs can quickly eat-up whatever money the litigants were fighting over in the first place.

The news this week that rugby star Israel Folau is raising a $3 million to fight his sacking by Rugby Australia has, understandably, divided the nation.

Without offering an opinion on Folau’s beliefs, social media posts or subsequent sacking, my reaction as a lawyer has centred on the money he’s seeking.

$3 million for legal fees is a lot.

A LOT.

Given most people don’t understand “where the money goes” in a trial, I thought I’d offer some insight into what might be going on behind the scenes in this very high-profile dispute.

Firstly, Folau would have engaged a top-flight law firm, the kind you find among the clouds in a skyscraper. So right off the bat, take whatever you thought you were going to spend and double it.

Big law firms can get great results, but they charge like wounded bulls. Every six-minute increment of the day is billed back to the client without fail. Every phone call, every email opened, every document browsed, every scribble on a sticky note, checking your phone at lunch … it’s all getting billed.

Then there’s disbursements; court lodgement fees, photocopies and the like.

There’s a joke that some big law firms refer to their photocopier as the “Senior Partner” as it generates so much income for their business (as much as $1 per page) and a case like Folau’s will require plenty of paperwork. It’s not uncommon in a blockbuster trial to see research and a brief that’s 10,000 pages long.

Copy that eight times to share with the team and it’s easy to see where the money starts to get eaten up.

Next expense is the lawyers themselves.

Solicitors charge between $350 to $600 per hour for their services, and upwards of $700 for a top gun, so it’s not outrageous to think Folau is paying about $4000 a day per Solicitor.  It’s a fair assumption he’s got a team of three or more on his case, too.

Now that you’ve got your team it’s time to go to trial, and that means hiring a Barrister (or team of Barristers) to argue your case through the courts. For a top-notch lead Barrister working out of Sydney, expect to pay upwards of $10,000 a day during the trial.

So for a team of three Solicitors, a Barrister and a lead Barrister, you’d be lucky to get much change out of $40,000 per day of the trail.

As a rule of thumb, for every $1 you spend in the trial, you match it with $1 spent in preparation. So a week-long trial at $40,000 per day? That’s $400,000 including preparation.

Add to that $80,000 in copying and disbursements (which is extreme) and another $50,000 just for the sake of it and it’s still almost impossible to see where the other $2.4 million is going.

I’m not suggesting that Folau is profiteering from this fundraising effort, because there’s other costs to consider too.

This battle is as much about hearts and minds as it is the law, so there’s probably a PR firm engaged too, whose job it is to paint Folau in the best light possible given he’s also being tried in the “court of public opinion”.

You could easily see another $500,000 eaten by a PR firm worth their salt which still brings our total to just over $1m.

Let’s add another $500k to be generous, bringing the total bill to $1.5 million – half what he’s raising.

So what happens to the rest of the money? Does he keep it? Here’s the question nobody’s asking … what if Folau loses?

Rugby Australia, who’re defending their right to shred Folau’s contract would have a similarly powerful legal team on their side, also likely to spend upwards of $500k to $1M and it’s a loser pays system.

So Folau, who has chosen to fight his sacking (which is every bit his right) not only has to cover his own legal bills, but potentially those of his former employer should he lose his case.

Would that be limited to $3m? Hard to say. It’s worth noting that Rebel Wilson was ordered to pay $4.1 million in costs in her battle with Bauer Media … enough to quickly shrink a property empire, that’s for sure.

It just goes to show that in this case, the only winners might indeed be the lawyers.

If you’ve got multiple super accounts, alarm bells should be ringing.

Not because you’re missing out on the compound interest of a consolidated nest egg, but because your super funds could soon rip an important safety net from under you.

From 1 July 2019, your super fund has a green light to cancel insurance policies attached to accounts that have been inactive for 12 months or more.

Sounds great! No more “lost super” being chewed up by fees!

But think about it. You’re 23, take a gap year, travel the world and come back to find you no longer have life insurance or income protection insurance on your super account that you planned on contributing to for the rest of your life.

About 12 million Australians hold insurance through their super fund, with about 80 per cent of policies provided automatically. For many, it’s the only insurance they hold.

Premiums start at just $300 a year, or $6 a week. This is a fraction of what you’d pay on the open market (upwards of $100 a month for an 18-year-old non-smoker working as a barista).

Although we’re always told to consolidate lost super, from an estate planning perspective it’s worthwhile maintaining a few extra accounts with smaller balances for the insurance benefits they bring, especially if you’re young or don’t have much in the way of savings or other assets.

If you have kids or a mortgage and you die young, these insurance benefits could be the difference between your family keeping afloat or losing everything after you die.

Although the deadline is looming, the good news is your super fund should give you the option to “opt-in” to retain your insurance.

To check if you’ve got super floating around in smaller accounts, register for the government’s MyGov service online.  From there you can view which accounts hold super in your name and contact them to see if it’s not too late to retain your insurance benefits.

For a few phone calls, you could be saving your family a lot of pain in the future.

Key points:

• Many super funds will automatically cancel insurance policies on “inactive” accounts
• Opt-in to keep your insurance before 1 July 2019 (sooner the better)
• Life insurance can be worth upwards of $250,000 even on small holdings.
• The insurance policies attached to “lost super” can be far more valuable than rolling-over.